Tip of the Month - January 2003

MANAGING THE RISK OF THE BOARD DISCONTENT

Managing the risk of board discontent boils down to keeping the board from being bored or overworked. As the governing body of a nonprofit, the board is responsible for creating or shaping the vision, mission, values and policies of the organization. In order to carry out their roles, board members must have a good grasp of what the organization is trying to accomplish and how to go about helping it get there. 

Some of the things that get in the way of effective board leadership:

q     Bylaws that are inconsistent with the current policies or practices of the organization. 

q     A board that is too small (overworked), or too large (members may be under worked—a “bored board” or the size creates an unmanageable administrative burden).

q     Board members that are bleary with respect to their role, thus they make day-to-day management decisions rather than policy decisions.

q     Work that should be assigned to committees is handled in the board meeting.

q     Lack of communication about time and method of meeting (face-to-face; conference call; faxed or e-mailed query and response).

q     Too much information about an agenda item sent in an unorganized fashion.

q     Too little information about an agenda item delivered too late.

q     Meetings go on ad infinitum and are unfocused. 

q     Discussions dominated by one or two people; board chair doesn’t have skills to run a tight meeting.

q     No policy on handling conflicts of interest between individual board members and the nonprofit.

 Some of the things you can do to help board members make informed decisions can be divided into annual, monthly and pre-meeting tasks.

 Each year

q     Orient new board members to their role and responsibilities.

q     Provide each member with an updated Board Manual (a concise compendium of documents and background information) that includes:

·        Articles of incorporation

·        Mission statement (why does your nonprofit exist?)

·       Bylaws

·       Key policies that pertain to the board and the organization

·        Goals – what the nonprofit trying to accomplish

·        Historical overview or fact sheet (How and why was the organization created? What have been the critical developments in its history?)

·        Overall responsibilities of board members’ and those for each officer

·        A list of current board members with titles, affiliations, and contact information

·        A staff organizational chart

·        An annual report or programmatic summary

·        The most recent audited financial statements or independent financial review 

·        Long-range program and financial plan (strategic plan)

·        A two-to-three paragraph biography of the chief executive 

·        A copy of the nonprofit’s directors’ and officers’ liability policy 

q     Create an opportunity for discussion about the current activities and long-range plans of the organization during a regularly scheduled board meeting, an annual retreat or other meeting specifically for this purpose.

 Each month

q     Distribute accurate, timely financial statements. For midsize to large nonprofits these statements may be presented to a Finance Committee, with less frequent financial reporting to the full board.

q     Share information about the organization’s ongoing activities and upcoming events via newsletter, e-mail from the chief executive, conference call, or other communiqué.  

Prior to each board meeting 

q     Supply advanced notice (at least 30 days) of meeting time, place, and method.

q     Send information about accommodations, travel arrangements and expense reimbursement policy/procedure.

q     Deliver a detailed agenda, at least one week before the meeting, indicating the approximate amount of time that will be spent on each item.

q     Include with the agenda concise, organized background information to support informed decision-making on key items.

 With these resources in hand your board can set about the business of governing, content from your treatment of them that they are valued members of the nonprofit’s leadership.

View Past Tips of the Month

May 2004 - One Million Minnesotans Can See Your Form 990
April 2004 - Avoid Unexpected Cost of Directors, Officers, and Organizational Liability
March 2004 - Strategies for Reducing Operating Costs
February 2004 - What Can Nonprofits Due During an Election Cycle
January 2004 - Celebrate Your Nonprofit
November 2003 -Get Your Board on Board
October 2003- Take a Walk-About for Safety
September 2003- Exit Interviews-Learn from those who Leave
August 2003 - Participant Waivers: The Good the Bad and the Ugly
July 2003 - Practical Tips for Reference Checking
June 2003 - Evaluating Your Insurance Professional 
May 2003 - Supervising Volunteers
April 2003 - Protect Your Assets with Sound Internal Controls
March 2003 - Teaching Computer Users to Surf Safely
February 2003 - Involve Clients in Protecting Their Own Safety
January 2003- Managing the Risk of Board Discontent

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